Egypt’s economy depends mainly on agriculture, media, petroleum imports, natural gas, and tourism, there are also more than three million Egyptians working abroad, mainly in Libya, Saudi Arabia, the Persian Gulf and Europe.
The completion of the Aswan High Dam in 1970 and the resultant Lake Nasser have altered the time honored place of the Nile River in the agriculture and ecology of Egypt.
A rapidly growing population, limited arable land, and dependence on the Nile all continue to overtax resources and stress the economy.
The government has invested in communications and physical infrastructure. Egypt has received United States foreign aid since 1979 (an average of $2.2 billion per year) and is the third largest recipient of such funds from the United States following the Iraq war.
Egypt’s economy mainly relies on these sources of income: tourism, remittances from Egyptians working abroad and revenues from the Suez Canal.
Egypt has a developed energy market based on coal, oil, natural gas, and hydro power. Substantial coal deposits in the northeast Sinai are mined at the rate of about 600,000 tonnes (590,000 long tons; 660,000 short tons) per year.
Oil and gas are produced in the western desert regions, the Gulf of Suez, and the Nile Delta. Egypt has huge reserves of gas, estimated at 2,180 cubic kilometres (520 cu mi) and LNG up to 2012 exported to many countries.
In 2013, the Egyptian General Petroleum Co (EGPC) said the country will cut exports of natural gas and tell major industries to slow output this summer to avoid an energy crisis and stave off political unrest, Reuters has reported.
Egypt is counting on top liquid natural gas (LNG) exporter Qatar to obtain additional gas volumes in summer, while encouraging factories to plan their annual maintenance for those months of peak demand, said EGPC chairman, Tarek El Barkatawy.
Egypt produces its own energy, but has been a net oil importer since 2008 and is rapidly becoming a net importer of natural gas.
Economic conditions have started to improve considerably, after a period of stagnation, due to the adoption of more liberal economic policies by the government as well as increased revenues from tourism and a booming stock market.
In its annual report, the International Monetary Fund (IMF) has rated Egypt as one of the top countries in the world undertaking economic reforms. Some major economic reforms undertaken by the government since 2003 include a dramatic slashing of customs and tariffs.
A new taxation law implemented in 2005 decreased corporate taxes from 40% to the current 20%, resulting in a stated 100% increase in tax revenue by the year 2006.
Foreign direct investment (FDI) in Egypt increased considerably before the removal of Hosni Mubarak, exceeding $6 billion in 2006, due to economic liberalisation and privatisation measures taken by minister of investment Mahmoud Mohieddin.
Since the fall of Hosni Mubarak in 2011, Egypt has experienced a drastic fall in both foreign investment and tourism revenues, followed by a 60% drop in foreign exchange reserves, a 3% drop in growth, and a rapid devaluation of the Egyptian pound.
Although one of the main obstacles still facing the Egyptian economy is the limited trickle down of wealth to the average population, many Egyptians criticise their government for higher prices of basic goods while their standards of living or purchasing power remains relatively stagnant.
Corruption is often cited by Egyptians as the main impediment to further economic growth. The government promised major reconstruction of the country’s infrastructure, using money paid for the newly acquired third mobile license ($3 billion) by Etisalat in 2006.
In the Corruption Perceptions Index 2013, Egypt was ranked 114 out of 177.
Egypt’s most prominent multinational companies are the Orascom Group and Raya Contact Center.
The information technology (IT) sector has expanded rapidly in the past few years, with many start-ups selling outsourcing services to North America and Europe, operating with companies such as Microsoft, Oracle and other major corporations, as well as many small and medium size enterprises.
Some of these companies are the Xceed Contact Center, Raya, E Group Connections and C3. The IT sector has been stimulated by new Egyptian entrepreneurs with government encouragement.
An estimated 2.7 million Egyptians abroad contribute actively to the development of their country through remittances (US$7.8 billion in 2009), as well as circulation of human and social capital and investment.
Remittances, money earned by Egyptians living abroad and sent home, reached a record US$21 billion in 2012, according to the World Bank.
Egyptian society is moderately unequal in terms of income distribution, with an estimated 35–40% of Egypt’s population earning less than the equivalent of $2 a day, while only around 2–3% may be considered wealthy.